Conway changes tone on Ellison PeopleSoft CEO says Oracle fight is not personal

Benjamin Pimentel, Chronicle Staff Writer
Thursday, September 23, 2004

 There has been no love lost between Oracle Corp. CEO Larry Ellison and his counterpart at PeopleSoft Inc., Craig Conway, as the Redwood City giant wages a bitter fight to take over the Pleasanton firm.

When Oracle started its campaign last year, Conway called Ellison a sociopath. Ellison countered by joking about whether he’d rather shoot Conway or his dog.

But after 15 months of pitched battle, punctuated by Oracle’s surprise victory against the Department of Justice earlier this month, Conway’s tone has changed.

In an interview with The Chronicle Wednesday, Conway said that, despite the bitter exchanges in the past, Oracle’s attempt to gobble up his company should not be seen as a personal battle between the two executives.

In a marked departure from his caustic remarks against Oracle’s controversial leader, Conway acknowledged Ellison’s major role in technology as a database pioneer.

“My view is almost exclusively business and zero percent personal,” he said in an interview in San Francisco, where PeopleSoft is hosting a major conference for customers and users. “There isn’t really the personal battle between Craig Conway and Larry Ellison that the media or even the common person would assume there is.”

“Larry founded, built and has defended the largest database company in the world, and most of our customers run on Oracle’s database,” he added. “He sees something of great value in PeopleSoft, and he’d like to capitalize on that value to further grow his company. That’s truly how I feel.”

Conway came across much differently last year when Oracle began its hostile bid, calling the move diabolical and an “atrociously bad behavior from a company with a history of atrociously bad behavior.”

In a July 2003 speech to analysts, Ellison said, “I think at one point Craig thought I was going to shoot his dog. … If Craig and the dog were standing next to each other, trust me — I have one bullet — it wouldn’t be for the dog.”

Oracle’s $7.7 billion bid to take over PeopleSoft got a big boost recently after a federal judge ruled in favor of the Redwood City giant, whose planned merger was opposed by the Justice Department.

Conway said his team is bracing for more fallout from the ruling, especially as PeopleSoft prepares to wrap up its third quarter, which ends this month.

“There is a belief that PeopleSoft’s ability to conduct business will be seriously impacted, and there is no question that our business will be impacted,” he said. “The question is: to what extent?”

During the company’s last earnings call, Conway called the antitrust trial an “elephant in the room” that led potential customers to take a wait- and-see approach and cost his firm a 70 percent drop in profit.

But Conway said his team is still banking on the support of customers, which he said was highlighted by the record 15,000 attendees at this week’s PeopleSoft conference at Moscone Center.

“We hope to do everything we can to encourage them to move ahead (with contracts) by the end of our quarter,” he said. “We’ll just have to see whether we are successful in doing that or not.”

Conway declined to comment on what’s next in PeopleSoft’s battle with Oracle, except to affirm that the fight is not over. The Justice Department could still appeal the ruling, and the European Union has yet to approve Oracle’s planned merger, he said.

Oracle and PeopleSoft are also scheduled to face off in two trials. Next month, Oracle will try to persuade a Delaware court to remove PeopleSoft’s poison pill, the provision that allows its board to sell additional shares at a discounted rate to a select group in order to block a hostile bid.

In January, PeopleSoft will try to convince an Alameda Superior Court jury that Oracle’s hostile bid was a deliberate attempt to disrupt the Pleasanton firm’s business.

Conway expressed optimism about the coming court battles, saying, “I don’t think we’d be in those venues if we weren’t confident.”

The PeopleSoft conference has been an excellent opportunity for him and his team to assure PeopleSoft customers, he said.

But Conway acknowledged that he’s had a hard time answering one question: “When will it be over? And the reason that’s difficult to answer is it’s unlikely to have an answer for a long time.”

E-mail Benjamin Pimentel at bpimentel@sfchronicle.com.

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